U.S. employers hired the most workers in 10 months in December while boosting wages, pointing to sustained strength in the economy that could ease fears of a sharp slowdown in growth.

The upbeat employment report from the Labor Department on Friday stood in stark contrast with reports this week showing Chinese factory activity contracting for the first time in 19 months in December and weak manufacturing across much of Europe.

Concerns about the U.S. economy rose following surveys showing sharp declines in consumer confidence and manufacturing activity last month, which roiled financial markets. Both were seen as more red flags that the economic expansion, now in its ninth year and the second longest on record, is losing steam.

“The jump in payrolls in December would seem to make a mockery of market fears of an impending recession,” said Paul Ashworth, chief economist at Capital Economics in Toronto.” “This employment report suggests the U.S. economy still has considerable forward momentum.”

Nonfarm payrolls jumped by 312,000 jobs last month, the largest gain since February, as employment at construction sites snapped back after being restrained by unseasonably cold temperatures in November.

There were also broad gains in hiring last month. Data for October and November were revised to show 58,000 more jobs added than previously reported. The economy created 2.6 million jobs last year compared to 2.2 million in 2017.

Average hourly earnings rose 11 cents, or 0.4 percent, in December after gaining 0.2 percent in November. That lifted the annual increase in wages to 3.2 percent, matching October’s rise, from 3.1 percent in November. The average workweek increased to 34.5 hours in December from 34.4 hours in November.

The unemployment rate increased to 3.9 percent from a near 49-year low of 3.7 percent in November as a strong labor market pulled some 419,00 jobless Americans from the sidelines.

The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, rose two-tenths of a percentage point to 63.1 percent, the highest level since September 2017.

The strong employment report likely keeps the Federal Reserve on course to continue raising interest rate this year, deepening its rift with Wall Street and President Donald Trump, who has chastised the Fed and its chairman, Jerome Powell, repeatedly for the rate increases. Powell is due to appear on a panel with his two predecessors about two hours after the report’s release.

The U.S. central bank raised rates four times in 2018. The Fed last month forecast two rate hikes this year and signaled its tightening cycle is nearing an end in the face of financial market volatility and slowing global growth.

U.S. financial markets are projecting no rate hikes in 2019. In the latest signal that investors see little room for the Fed to lift rates any further, yields on 2-year U.S. Treasury notes US2YT=RR on Thursday dropped below the Fed’s policy rate for the first time in more than a decade.

U.S. stock index futures initially pared gains after the employment report on Friday before recovering to earlier levels, while U.S. Treasury yields rose. The U.S. dollar .DXY turned positive against a basket of currencies.

"This should, at least for today, mute expectations that the Fed is off the table completely this year,” said Omair Sharif, a senior economist at Societe Generale in New York.

BROAD EMPLOYMENT GAINS

The December jobs gain pushed total U.S. employment above 150 million jobs for the first time. The Labor Department has not been affected by the partial shutdown of the U.S. government and will continue to publish economic data complied by its statistics agency, the Bureau of Labor Statistics.

Data releases from Census Bureau and Bureau of Economic Analysis have been suspended during the shutdown, which started on Dec. 22 amid demands by Trump for $5 billion in funding for a wall on the U.S.-Mexico border.

The strong labor market suggests the economy will continued to expand this year despite the ebb in consumer confidence, continued weakness in the housing market as well as cooling manufacturing activity.

Growth forecasts for the fourth quarter are around a 2.6 percent annualized rate, with risks tilted to the downside amid fading stimulus from the Trump administration’s $1.5 trillion tax cut package, a trade war with China and policy uncertainty in Washington.

The economy grew at a 3.4 percent pace in the third quarter. It needs to create roughly 100,000 jobs per month to keep up with growth in the working-age population.

With the labor market viewed as at or beyond full employment, job growth is expected to slow this year as workers become more scarce. Anecdotal evidence has been growing of companies experiencing difficulties finding workers, and raising wages to retain and attract employees.

There are concerns that tightening financial market conditions because of the steep stock market selloff could hurt hiring. The government shutdown, if it extends beyond next week, could weigh on January payrolls.

Hiring last month rose across all sectors. Retail employment increased by 23,800 jobs. Employment at construction sites rebounded last month, with companies hiring 38,000 employees after adding no workers in November.

Manufacturing payrolls increased by 32,000 jobs in December, but could surprise on the downside after a measure of factory employment fell last month.

Professional and business services employment increased by 43,000 jobs last month and government payrolls rose 11,000. Employment in the leisure and hospitality sector increased by 55,000 jobs.